Snapchat's owner announces the elimination of 1,000 jobs, citing the rise of AI to justify its restructuring amid financial pressure and increased competition.

Will artificial intelligence become the death knell for tech jobs? Snap Inc., owner of Snapchat, announced Wednesday a new wave of layoffs affecting approximately 1,000 employees, or 16% of its workforce, as part of a cost-cutting plan aimed at improving profitability. In an internal memo made public, CEO Evan Spiegel also confirmed the elimination of more than 300 unfilled positions.

The executive justifies the move by citing ongoing technological advancements: “Rapid progress in artificial intelligence allows our teams to reduce repetitive tasks, increase pace, and better support our community, partners, and advertisers.” He believes these measures should reduce the annualized cost base by more than $500 million by the second half of 2026 and pave “a clearer path to net profitability.”

Significant pressure on the company

This restructuring comes amid increased pressure on the company, which had 5,261 full-time employees at the end of December. Snap Inc. had already cut 20% of its workforce in the summer of 2022 and then another 10% in February 2024, before recruiting again in 2025. The group continues to face strong competition, particularly from TikTok, as well as a still-strained advertising market.

Two weeks before this announcement, the activist fund Irenic Capital Management, a shareholder with approximately 2.5% of the company, had publicly called for cost reductions, deeming it "disconcerting, to say the least" that the company remained unprofitable after fifteen years in operation. The fund also raised concerns about the future of the augmented reality glasses division, estimating that it had absorbed over $3.5 billion in investments, without management directly addressing these criticisms.

A trend in the tech world

On the markets, Snap Inc.'s stock rose about 6% on Wednesday on the New York Stock Exchange, although it remains down about 28% since the beginning of the year. The company also indicated it is targeting revenue of approximately $1.53 billion in the first quarter of 2026, representing a 12% year-over-year increase.

More broadly, these announcements reflect a sector-wide trend. According to the website Layoffs.fyi, nearly 90 technology companies have eliminated more than 72,000 jobs since the beginning of the year. Several groups cite the rise of artificial intelligence to justify these decisions.